Housing strength shelters Galliford from winter woe

Galliford Try has booked a record level of house sales since the start of the year despite prolonged winter conditions knocking production levels.

The housebuilding and construction group has been heartened by levels of activity in the housing market and has seen reservations rise 6.0% per outlet since its last update in February.

Despite prices remaining challenging in the construction arm, the housebuilding unit's main focus is on margin enhancement and Chief Executive Greg Fitzgerald said he expected results for the full year to June 30th to would be in line with the current market consensus.

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The construction arm is battling to remain productive in a difficult market and has maintained a stable order book at the £1.6bn seen at the end of December, with cash balances remaining "satisfactory".

Although 77% of next year's construction revenue is secured, pricing remains challenging and the FTSE 250 group is continuing to focus on margin protection through securing projects with acceptable returns.

In housebuilding, Fitzgerald said he was encouraged by early signs of the Government's new Help To Buy scheme and as a result the company expected an increase in sales completion levels from next year.

The housing division saw a record £836m of sales reserved, contracted or completed, of which £632m is for the current financial year.

The group announced that Andrew Richards has been promoted to the new Managing Director at the housing division, having previously led Galliford's public-private partnership investment business.

Fitzgerald added: "The financial position of the Group remains strong and we expect to have modest net debt at the year end reflecting our increased investment in land."

Broker Jefferies said the group's contract selectivity and risk management process were proving effective at the construction business and that it was leaving its estimates unchanged for the current financial year for pre-tax profits of £72m, 14% ahead of 2012.

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